Impact of Tether trading on the Bitcoin price

It was Sunday night and I just found out about the article “The Big Short: Inside Crypto’s Doomsday Machine” on Reddit. The article is basically claiming that Tether — which is supposed to be fully backed by US dollars, is backed by nothing.

For those that have never heard about Tether, here’s a short summary:
Tether is a “stablecoin” because it was originally designed to always be worth $1.00. The company behind Tether claims to maintain $1.00 in reserves for each tether issued. Tether has a controversial story because of the company’s alleged role in manipulating the price of bitcoin, an unclear relationship with cryptocurrency exchanges, its apparent lack of a long-term banking relationship, and many “whistleblowers” on social media alleging the company for fraud.

I quickly jumped on Clubhouse and joined one of the crypto rooms. I started asking questions. Some of the people dismissed it without really giving credible arguments, normalized it as if it did not matter and would not affect Bitcoin at all, or negated it referring to one article that debunks the claims in the above article. Next, curious to discover more, I read through the Debunking Misconceptions From “The Bit Short: Inside Crypto’s Doomsday Machine”. I can say, the debunking was right on point and pointed to some of the wrong assumptions in the…